The long-term objective of this proposal is to apply a powerful "covalent tethering" technology to discover novel therapeutics for the treatment of type 2 diabetes. Protein tyrosine phosphatase-1B (PTP-1B) has emerged as a compelling target for treating diabetes, but it has been difficult to identify cell permeable, drug-like inhibitors of this important enzyme. Covalent tethering technology involves discovering drug-like fragments that bind to a target protein and assembling them into potent inhibitors. Cysteine mutations are introduced to target a site of interest and a collection of disulfide-containing fragments are screened to identify compounds that bind and form a disulfide bond. Compared to traditional screening, a greater chemical diversity is surveyed by identifying the individual components of binding and subsequently combining them into a common molecule. We propose to use covalent tethering and structure-based design to target two adjacent binding sites on PTP-1B. We will first identify pharmaceutically desirable phophotyrosine mimetics for the conserved active site and then identify fragments that bind to a unique, nearby site. These fragments will be merged into a bimodal inhibitor that combines potency and specificity to overcome problems observed with existing inhibitors. Covalent tethering is ideally suited to identifying such bimodal molecules. [unreadable] [unreadable]